|Be on the lookout for homeowner scams
Julie Garton-Good, GRI, DREI
Turn on the nightly news and you're likely to see the results of
unscrupulous scam artists preying on innocent homeowners. The ploys come in a
wide variety of applications---everything from driveway resurfacing to bogus
We all hope that we'll be wise enough to see through these scams, but
sometimes in an effort to have work done by the lowest bidder in the quickest
time frame, we may be duped.
Here are "red flags" to check out when working with home repair or
- Ask to see the contractor's state licensing credentials, verification of
his/her Workmen's Compensation policy as well as proof of liability insurance
coverage. It's a good idea to call the insurance company to see if the policy is
still in force.
- Check out the company with the local Better Business Bureau. They can tell
you if there have been any claims against them. If the company has recently come
from another area, call the BBB in their former location; Ask to see the
company's (and workmen's, if available) credentials. These could include letters
of reference, professional designations from national associations, etc. Just as
would be required if you were working with someone in a credit situation (which
you are), ask if the company is bonded (ask to see verification) and ask if they
carry errors and omissions insurance. If you still have questions about their
credibility, ask for a bank reference for the company.
- Be cautious working with someone who only provides you with references for
out-of-town work they've done. The same is true if they have no other local
phone number other than the motel down the street!
- Run, don't walk, away from the person requiring all cash up front or a
significant deposit. (Would YOU demand to be paid before you had rendered a
service?) If the explanation is that it is to cover the purchase of
materials/supplies, would you really be wise to do business with a company that
appears so financially unstable? Many of the signs of trouble are there
initially if we'd just pay attention to them.
- Be wary if the time for completing the job seems unrealistic (either too
short or too long).
- Your best bet in sizing up repair company and home service companies: speak
directly to others who have recently used this company and their services.
Seeing yard signs announcing that "Ajax Concrete has recently poured a new
driveway for this homeowner" is weak at best since some unscrupulous
companies actually pay homeowners to place advertising signs in their yard.
- Get a minimum of three bids. If it's a costly job, six estimates is more
When in doubt about using a company and/or service, it's best to do nothing
at all. There are very few instances when you wouldn't have ample time to first
check out the people you're considering dealing with and/or be able to find
another company to provide the service. Being cautious will take
you a long way in becoming "A Frugal HomeOwner!"